Macy’s says it is eliminating more than 10,000 jobs and plans to move forward with 68 store closures after a disappointing holiday shopping season. The department store chain also lowered its full-year earnings forecast.
The retailer said Wednesday that sales at its established stores fell 2.1 percent in November and December compared to the same period last year. Macy’s Inc. pointed to changing consumer behavior and said its performance reflects the challenges that are facing much of the retail industry.
As if to underscore that point, Kohl’s Corp. also reported disappointing holiday shopping numbers Wednesday.
Macy’s said the 68 store closures, which span the nation, are part of the 100 closings it announced in August. Of the 68, three were closed by the middle of 2016, 63 will close in the spring and two will be closed by the middle of 2017.
Some employees may be offered positions at nearby stores, but Macy’s estimates that 3,900 employees will be affected by the closures.
Macy’s also said it plans to restructure parts of its business and sell some properties. This will lead to the reduction of 6,200 jobs. The moves are estimated to save $550 million annually.
The company, which has been under pressure from investors to sell some of its valuable real estate, is selling or has sold three locations. It is leasing the properties back and will keep operating those stores.
Overall, Macy’s said, the job reductions represent about 7 percent of its workforce.
The company, which owns the Macy’s and Bloomingdale’s brands, has been struggling with declining traffic in its stores, where the bulk of its business is still conducted.
Longtime CEO Terry Lundgren, who is stepping down early this year and will be succeeded by Macy’s President Jeff Gennette, said in a statement the company is closing stores that are “unproductive or are no longer robust shopping destinations” as well as selling those with highly valued real estate.
Macy’s has seen sales growth slow as it and other traditional department store chains face competition from online and off-price rivals. It has tried new ways to attract shoppers, such as by offering more exclusive products, designating areas featuring “smart watches” and launching an Apple shop at its flagship New York store in Herald Square.
The company said Wednesday it plans to invest some of its savings in growing its digital business.
It said it now expects to earn between $2.95 and $3.10 per share on an adjusted basis for its 2016 fiscal year, versus its prior forecast of $3.15 to $3.40 per share. The company is scheduled to report full results in February.
Shares in Macy’s fell more than 10 percent to $32.20 in after-hours trading.
Kohl’s shares fell almost 15 percent to $44.15 after it cut its earnings guidance for fiscal 2016. It now expects $3.60 to $3.65 a share on an adjusted basis, down from its previous forecast of $3.80 to $4.00 per share.
The Associated Press contributed to this article.
One of these Macy’s stores is in downtown Minneapolis. This store used to be Dayton’s Dept. Store. Mary Tyler Moore’s statue is outside this store. The location is historically significant. A store was here for the past century. The culprit is on-line shopping. I can use this same device that I’m typing on to order almost anything. I can even order groceries for about a $5 fee. The old store building will probably become upscale condos. And the new occupants will order goods from Amazon.
Sadly, it’s a sign of the times. I was a classified advertising manager for our local newspaper and that method of advertising also fell victim to the internet.
Here in the UK, stores are also closing in large numbers. The most high profile recent bankruptcy was British Home Stores. The previous management did similar things to Macy’s. The now infamous Philip Green sold off the prime property and leased it back to a company owned by his wife who was resident in Monaco. This was all done to avoid the rapacious taxes that the government and local councils now heap on anyone attempting to run a business. Of course it only fixed things temporarily. Sir Phil saw the writing on the wall as sales plummeted and so sold off the now hugely indebted group to a sucker who claimed he could turn it around. BHS is now defunct and the UK government is chasing Sir Phil for some of the money he extracted while asset stripping BHS.
The message is….investors beware of retail. The CEO’s are not your friends and the macro climate is now hostile due to internet shopping.
In my opinion this is due to the bad management of Macy’s. They had poor sales during the Black Friday and Christmas which was a result of the lack of discount on a large amount of items. I have shopped at Macy’s for years (15+) and typically spend around $1000 during Black Friday/Christmas and didn’t find any of the typical items I buy on sale. I don’t think internet shopping is the problem when Nordstroms and Bloomingdales aren’t struggling.
Maybe if they hadn’t been so rude dropping all of the trump products recently they wouldn’t be losing so many sales. Bye, Bye!
Funny how Macy’s started their downward spiral as soon as they got involved in politics. I guess “Liberals/Progressives” don’t shop there. And now, neither do the Republicans. YAY Trump! God Bless America!
The planned to close stores early in spring of 2016 so the can’t plam elect president trump which the dem. Liberals will do Liz
Given all the recent mall attacks, is shopping online that bad?
Reuse closed stores for:
Business Seedbed Centers
Voc & Tech Ed Centers
Archieve.
Local museum.
Hospice.
Multi use center
Auto Services
TV & Movie prod Indie,
Gun Range?
Transit hub for buses??
parking center
Lab
So much for Obama’s booming? economic growth??
Macy’s decided to get into politics slamming Trump!! Hey knuckleheads……………..your WERE a retail store. NOW pay the price for you’re stupidity. DRAIN the swamp!!!